Index Linked Pensions for
Expats

There is a particular anomaly in the way that British expats are treated
when it comes to them getting their pensions. In some countires the British
pensions that the expats receive are index linked, and in others they
are not index-linked pensions, they are just frozen from the date they
start.

Here is an example of the scenario:

Mr X emigrates to Canada in mid working life.He is around 45 years old.
He spends the next 20years in Canada, but then decides to return to the
UK just before his 65th birthday. He will get his full basic pension which
is fully index-linked.

b. Mr Y spends his whole working life in the UK, looks forward to his
retirement and then finally and retires with a full pension. However,
he emigrates to Canada just after his 65th birthday. His pension is not
index linked, and is frozen at the starting amount.

If Mr Y had gone to the USA however, his pension would be index-linked,
and if he had gone to any of the countries that are members of the European
Union, he would have got a full index-linked pension.

As a result of the present British policy, Britons who retire to 48,
mostly Commonwealth, countries have their pensions frozen at the UK rate
in force at the date they emigrate (or reach pensionable age after emigration).
Yet Britons who retire to EU nations, the USA, Israel, Turkey and several
other countries maintain parity with UK-based pensioners.

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